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Intel's Strategy and Paul Otellini

CEO of Intel Corp. Paul Otellini has been making sweeping changes in the chipmaker’s structure, organization, and strategy. Instead of merely focusing on a single chip design, they are starting to become focused on various customer needs and have begun to develop chips for various types of markets. In order to accomplish this, Otellini has restructured the organization into teams that focus on five different markets. Evidence of this new approach include changes from being stable, functional, individual oriented, hierarchal, and job requirements oriented; to being dynamic, product/customer oriented, team oriented, lateral/networked, and customer oriented. Intel is becoming more flexible in its strategic approach, and this is also clearly seen in hiring Otellini as CEO, since he is the first CEO in Intel’s history to not have a degree in engineering. Clearly, they are on the road to change.

One of Otellini’s changes includes using a “two-men-in-the-box” approach where two execs each will head specific departments. Although Intel has used this structure before, the new restructuring is trickier since each unit is responsible for several market segments, making dividing up task difficult and extremely crucial. This “two-men” approach eliminates the old unity of command principle where each employee has one boss to report to, and creates multiple bosses fore each employee. This system has advantages as well as drawbacks. Advantages would be more resources to use for projects and strategy, resources being knowledge since two heads are better than one. A teamwork atmosphere helps get jobs done better and with more input. Drawbacks, however, would include disorganization sue to employees not knowing who to report to. This also can lead to inefficiancies and work not being completed on time or properly, due to lack of proper communication. Employees may have a tough time making the adjustment if they are used to the traditional style. They also may feel that they wouldn’t be acknowledged enough because they would have multiple people seeing them do different tasks.

Otellini is turning Intel into more of a horizontal organization. This can be seen in his “two-men” approach and team structuring. His restructure is also causing more employees to be customer minded, making them closer to the customer in a sense. He has clearly developed new product design teams to cater to each target market. This restructure has also made Intel more organic than mechanical. More people are doing a variety of tasks, and again, teamwork is becoming more of a priority. This is in an effect to become more flexible and a stronger player in specific markets.

In the end, Otellin needs to measure Intel’s effectiveness by the fruits that it bears. The success of the Centrino product is a key indicator. He will need to constantly monitor how each product is doing in the specific market it was designed for as well as monitor employee satisfaction. Though the structure and organization may be changing, business is still business and there are some key factors that will remain the same, such as profit, employee satisfaction, and owner (stockholder) wealth. These will remain the indicators of success.